Small companies typically prefer____________ to borrowing from a bank because it is a source of funding where the company is not obligated to _____________________ .

Question

Quizplus · Accepted Answer

Small companies typically prefer an IPO (Initial Public Offering) to borrowing from a bank because it is a source of funding where the company is not obligated to make interest payments. IPOs involve selling shares of the company to the public, which does not require the company to pay interest as a loan would.

Small Companies Typically Prefer____________ to Borrowing from a Bank Because